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Fantastic Footwear can invest in one of two different automated clicker cutters. The first, A, has a $110,000 first cost. A similar one with
Fantastic Footwear can invest in one of two different automated clicker cutters. The first, A, has a $110,000 first cost. A similar one with many extra features, B has a $602,000 first cost. A will save $50,000 per year over the cutter currently in use. B will save $170,000 per year. Each clicker cutter will last five years. If the MARR is 8 percent, which alternative is better? Use an IRR comparison. For the increment from the do-nothing alternative to cutter A, the IRR is percent. For the increment from cutter A to percent. Therefore, cutter B, the IRR is should be chosen. (Type integers or decimals rounded to one decimal place as needed.)
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